Austerity, Covid and economic resilience

Good morning from New Economy Brief. 

As the Covid-19 Inquiry dominates the headlines, the TUC conducts its own investigation into the UK’s Covid response and preparedness. But rather than dodgy WhatsApps, this new report explores how austerity left the country “hugely unprepared” for the pandemic across four key pillars: 

• Safe staffing levels in public services
• Public service capacity and resources
• A strong safety net through the social security system
• Robust health and safety protections at work

We take a look at each of these pillars and how greater economic resilience could mitigate future crises. 

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Safe staffing levels in public services. The report finds that “multiple years of pay caps and pay freezes” left both health and social care “dangerously understaffed” during the pandemic due to low recruitment and increased staff turnover. Between 2010 and 2020, the number of nurses per capita in the UK grew by less than one per cent compared to the OECD average of 10 per cent. The report states that in the months before the pandemic, the average NHS worker was earning £3,000 less in real terms than in 2010 and that in social care, the turnover rate for staff in England increased from 22 per cent in 2012/13 to 31.8 per cent in 2019/20.

• Safe staffing and the law. The Royal College of Nursing is campaigning for legislation to guarantee nurse staffing levels in England across all sectors and settings as currently there is no such law in England. Wales implemented the first safe staffing levels law for nurses (The Nurse Staffing Levels (Wales) Act 2016), requiring health boards to provide sufficient nursing staff “so that all patients can receive sensitive care”. However, Section 25B only covers certain healthcare areas, with the RCN Wales continuing to to campaign for the extension of Section 25B to new settings, particularly mental health inpatient wards, community nursing, and care homes. Scotland implemented the first UK safe staffing law covering both health and social care (Health and Care (Staffing) (Scotland) Act 2019). However, implementation was delayed due to the pandemic with Act due to come into force in 2024. 

Public service capacity and resources. In 2020, spending per capita on transport, housing, childcare, schools, higher education, police, fire services and environmental protection was lower than in 2010. The TUC argues that these limited public services had a negative impact on “civil contingencies” and children’s education during the pandemic. 

• Children’s social care. One particular area where underfunding arguably led directly to lack of support for vulnerable people during the pandemic was children’s social care. Ofsted found that the pandemic “exacerbated existing challenges” such as delays in the family justice system and “existing staffing issues”. The number of council-employed social workers in 2021 was 1.5% lower than in 2020, and the number of social work jobs in local authorities fell from 17,455 to 17,280 over the same period. BASW, the union representing social workers, has highlighted the negative “consequences of the Covid-19 pandemic on funding, on services and on wellbeing” but have highlighted that behind this, there was a “backdrop of long-term underfunding of social services”. Care leavers, who normally should be supported by local authority teams in finding education and employment, are entering the workforce and education at lower rates than pre-pandemic. 

A strong safety net through the social security system. Benefit cuts largely made between 2010 and 2016 damaged the social security safety net and caused increases in poverty levels, argues the TUC. It highlights that “living in poverty was associated with greater risks of exposure to Covid-19, and greater levels of vulnerability to more serious health consequences from being ill with Covid”.

• Systemic change. The pandemic exposed a vast number of people to job insecurity who may not have had previous experience of the social security system. With the backdrop of a weakened social security system following austerity policies, the government was forced to introduce a number of quick measures to guarantee people’s incomes such as an uplift in Universal Credit and the furlough scheme. Social Policy academic Ruth Patrick critiqued these measures as failing to implement “systemic” or “enduring” reforms which could provide much-needed resilience in the face of future crises. The New Economics Foundation suggests that a Living Income scheme, guaranteeing a minimum income level beneath which nobody can fall, could provide a more robust social security system. The good news for proponents of such systemic change is that attitudes to social security seem to have changed because of the pandemic. A peer-reviewed study in 2021 found that the pandemic had led to an increase in support for Universal Basic Income both in the US and UK.

Robust health and safety protections at work. Health and safety took on a new meaning during the pandemic amid the presence of such a contagious and in some cases deadly disease. But according to the TUC, “the enforcement of rules to keep workers safe at work was compromised by cuts that decimated public health and workplace safety regulator” which particularly affected those who couldn’t work from home. Staffing numbers at the Health and Safety Executive, for example, have been cut by 35% since 2010, and the number of workplaces investigated by a safety inspector fell by 70% from 2010 to 2020. To avoid such issues in the future, the TUC proposes “long-term, adequate funding of health and safety regulators”, “a realignment of health and safety regulation is needed to ensure independence” and better “regulatory clarity”, ensuring “greater level of awareness among employers, the public and stakeholders.”

Austerity on trial. The wider significance of highlighting the relationship between austerity policies and Covid is twofold. First, the Covid response highlighted cracks in state capacity that normally go under-analysed, whether that is lab capacity, sick pay levels, or number of health and safety inspectors. These areas were often the target of cuts precisely because they got little attention and therefore less public backlash. This inquiry is an important opportunity to shine a light on these decisions, and provides an important example of the link between public spending, state capacity, and economic resilience. Perhaps the more important reason is more forward-looking. State capacity in the UK is likely to be stretched in similar ways again in the near future, whether by other pandemics, by the effects of climate breakdown, or other unforeseen events. At the same time, the government has pencilled in yet another round of public spending squeezes in the middle of the decade in order to comply with their fiscal rules. With UK public spending levels back at the centre of national debate, this inquiry’s verdict could have a significant impact on wider attitudes towards public spending.